Gold Price Prediction – Prices Form Doji Day as Indecision Sets In

Gold prices moved sideways forming a doji day where the open and the close are at the same level which is a sign of indecision. The dollar moved higher but the trend remains downward sloping. US yields moved lower. Gold was unable to gain traction despite continued comments from Federal Reserve Chairman Jerome Powell who warned about significant uncertainty regarding the pace of the U.S. economic recovery. US Housing increased less than expected but applications for new home loans surged to an 11-year high. Gold implied volatility, which is used to price options, declined to 18% but is still above the average during 2019. This is down from a high of 55% in March.

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Technical analysis

Gold prices moved sideways but remain above support is seen near the 10-day moving average at 1,718 Target support is seen near the 50-day moving average at $1,715. Short term momentum has turned negative as the fast stochastic generated a crossover sell. The current reading on the fast stochastic is 75, down from 77. Medium-term momentum if flat as the MACD histogram is printing near the zero-index level with a flat trajectory that points to consolidation.

Housing Starts Rose Less than Expected

U.S. homebuilding increased less than expected in May, but a strong rebound in permits for future home construction. Housing starts rose 4.3% to an annual rate of 974,000 units in May, according to the Commerce Department. Starts declined 26.4% in April and 19.0% in March. They dropped 23.2% on a year-on-year basis in May.